Book

This is a screen shot of the price list for obtaining ISBN numbers. Which version do you believe is their most popular one?
Take a look at this and see if you agree with my readings of this

On the technical side, this is a case of non-linear pricing. That is the price per unit decreases as the volume of units purchased increases. The first ISBN costs $125 but 1000th ISBN costs only $1. The reasons are many fold, decreasing utility to customers, alternatives available when you are buying that many ISBNs, etc.

The more interesting aspect is the price points of single ISBN vs. 10 ISBN. Why is a single ISBN priced at $125 but ISBNs are priced only twice as much?
Which version do you think is more popular – the single ISBN or the 10 ISBN version?

As with any pricing scenario let us start with the customer segment than the product. These two prices tell us more about the customers they are targeting and the version they are nudging their customers to buy.

Who buys ISBN by going to a self-serve website? More specifically who buys just one ISBN?

The first time writers looking to self-publish their books. They come with an idea and unshakeable hope that this book is going to be a hit. No ISBN? No hardcover book!

The price $125 must have come from an analysis of these self-publishing authors and their willingness to pay and wherewithal to pay. After all there are alternatives like going with Kindle publishing that requires no ISBN number.

But why stop with $125 when you can get another $125 at no incremental cost? Take a look at what the website says below the price list

The customer has already made the decision to buy the first ISBN now if you sell them the hope that they could be producing more books in the future you are able to capture incremental value with little or no cost to you.

Surely every first timer has at least one more book left in them or at the very least they could be releasing soft cover version of the same. Hence the second version that offers 10 ISBNs for the same price it would cost to buy the second ISBN.

Given these two options it is highly likely that most customers buy the $250 bundle.

You have seen my posts on Groupon and the hidden costs of doing a promotion that gives away 50% off to acquire new customers. I have written a eBook, To Group Coupon or not, to help Small Business owners understand the math and metrics of such a deal. The book link is http://book.MathMarketer.com

The book received great reviews from two established Pricing experts, Mr. Reed Holden, Author of Pricing With Confidence and Mr. Ronald Baker, Author of Pricing With Purpose.

I understand you read my blog for Marketing, Analytics and Pricing and you most likely are not a small business owner. It is still a great read if you want to understand the hidden costs of any promotion and how and when to add a new sales channel.

I would appreciate if you can give it a plug – write about it in your blog, tweet the book link and tell your business owner friends about it.

I have mixed feelings about the book. The first thought I had was that the book reads like a blog and probably would have been a very good blog that draws lots and lots of comments. That said, the flip side is I think it needs tighter editing. The discussions in the chapter definitely need to have a better flow. The conclusions at the end of each chapter do not help.

I am impressed in general by the logic and analysis McKenzie applies to economic and pricing puzzles. But for most puzzles there seems to be equally plausible alternate explanation.

In the first few chapters he talks about the logic of buying vs renting houses. His discussion of the homeowner tax credit flows to the renters in the form of lower rent sounds plausible. Except the argument ignores the possibility that not all renters may have credit history to buy house or not all of the rental properties are available in nice neighborhoods people would want to live in.

Regarding free WiFi in coffee shops, McKenzie argues that sell the value of coffee and give free WiFi since the marginal cost to provide this service is $0. Again I do not agree with this. What about the fairness argument, why should those who just drop in to grab coffee and run out should subsidize the WiFi used by a few who spend hours at the shop?

On of the puzzles is why prices end in 9, I cannot say I understand the reasoning. There was an article on the same topic in The Times some time back. I liked that article a whole lot more.

As I said before, the topics discussed in the book would have been great in a blog format.